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horseandcart November 18, 2008 5:58 PM

I don't get what point you're making in your last paragraph.

There's only one way this is going to end up: Five Year Tractor Plans/Giant Leap Forward known as the 'Green car Economy'

Tis amazing to live through times to see what was the bastion of red-blooded capitalism and free enterprise - that went hand-in-hand with muscle cars, Steve McQueen's Bullitt and so on - reduced to 'beer and sandwiches with 'the brothers' of the 1970s situations but with bells on.

A dead US industry that can't compete in the world propped up by taxpayers, presided over by ranks of highly-paid bureaucrats, second-guessing every minute operating decision. Pitiful. The US auto industry and the US generally is almost in an instant becoming a planned, state economy.

Just let it go. Send GM and the rest(including the big US tier one suppliers) into bankruptcy and re-sort the assets. The fundamental problem is the industry is geared up for sales of 17m each year whereas, without the credit bubble, the sustainable demand is at best 11m units, or 40% less, from here on in. Somebody's got to go. It's not a question of producing 'greener', smaller cars, it's simply America has lived on tick and now has to adjust to a massive step-change, downwards, akin to what Russia went through in 1991, when its economic output collapsed by 20%.

The Yanks are finding it real hard to accept; they're not top dog any more. Haven't been in reality for more than twenty years when it comes to high-tech, civilian industries and general productivity. They'll kick and scream and pay themselves with printed dollars temporarily but in the end, before this time next year, they'll be on their knees looking for work at $5/hour not the $45/hour that moderately skilled workers were pulling down until recently at the 'big three'. In fact if thet don't get with the program - as they themselves are wont to say - then the original US auto king, Henry Ford's famous five-dolllar day just might make a comeback for joe sixpack.

Zeddy November 18, 2008 8:25 PM

Isn't it more likely to be Geely Automobile. A quick reworking of their moniker and no one will be any the wiser.

Even the Geely badge looks like GM's share price/liquid assets.

www.geely.com/.../international

Maxisking November 18, 2008 9:50 PM

When you look at GM and Ford, one of the main reasons they are in the financial mess, is the pension and health costs of the retirees.

It doesnt matter who owns the company, or if the US Government bail it out, until it deals with this issue, it will continue to go cap in hand for money.

Noone can hide the fact that these two companies need to re-structure the business and maybe if the US Gov wants to bail it out, it should 'just; take the Pension and medicosts onto the business.

This would free GM and Ford to focus on streamlining the business and saving thousands of jobs.

If China takes over, will it want to take on the additional pension costs too - No.

horseandcart November 19, 2008 8:45 AM

China ain't gonna buy GM, or Ford. For one thing GM has net worth of $-60bn. In other words even if the Chinese, or any buyer, got it for nothing they'd be lumbered with 60 billion dollars of GM's built-up over years debts and liabilities.

Obama and his interventionist crew will bail it. He gave a speech yesterday lambasting "deniers of global warming". America, like UK has gone nuts. They'll give GM and Ford billions of taxpayer money and then force them to go 'green'. It's no different to the planned economy of the Soviet Union in the 1930s. God help the ordinary Yanks and us.

RobotBoogie November 19, 2008 2:47 PM

Actually, the 1930s economy that it most resembles is the US New Deal which historians seem to view as something of a success. But you are right, there is no point handing over Government money to the Big Three unless there is dramatic restructuring.